November 2017 Budget: what it means for pensions

The Autumn Budget, announced on 22 November 2017, avoided any substantial changes to pensions.

The fear that the Chancellor was plotting a raid on pensions proved to be unfounded,with no changes to pensions tax relief. Indeed, there was very little in this Budget about pensions at all, but there are a few points you might be interested in.

State Pension
The basic state pension will rise by 3% in April 2018. Annual increases in the state pension are covered by the ‘triple lock guarantee’, which ensures that it rises each year by either September’s Consumer Prices Index (CPI) inflation figure, average wage growth or 2.5% – whichever is highest. This year, the CPI of 3% in September 2017 dictated the increase to the state pension.

Lifetime Allowance
The lifetime allowance for pension savings – the total value of pension benefits you can receive in your lifetime without having to pay a tax charge – will also increase in line with CPI, rising from £1 million to £1.03 million in April 2018.

Income tax
The personal allowance – the amount you can earn before you pay income tax – will rise from £11,500 to £11,850 in line with inflation in April 2018. The higher-rate tax threshold will also increase for people living in England, Wales and Northern Ireland, from £45,000 to £46,350.

Capital gains tax, savings and dividend taxes
No changes to capital gains tax or taxes on savings or dividends, and no changes to inheritance tax either.